13. Deputy Éamon Ó Cuív asked the Minister for Public Expenditure and Reform his plans to allow the Department of Rural and Community Development to prepay local authorities at the end of 2017 for work to be carried out after payment is received by them; if the Comptroller and Auditor General has been consulted regarding this practice; and if he will make a statement on the matter. (Question 47141/17 asked on 09 Nov 2017)

Deputy Éamon Ó Cuív: Last year the Department of Public Expenditure and Reform gave permission to the then Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs to prepay money to local authorities, which is an unusual practice. To date, only 60% of that money has been spent and the rest is lying in local authority coffers, which is another very unusual practice. Is that likely to be repeated again at the end of this year?

Deputy Paschal Donohoe: The disbursement of funds from the Vote of the Department of Rural and Community Development is a matter for the Accounting Officer of that Department in the first instance. My Department’s circular No. 13/2014 clarifies arrangements for the management and accountability for grants from Exchequer funds. In particular, section 6 provides that the default position is that grants should be paid on the basis of vouched expenditure. However, where pre-funding is required, prior approval must be sought from my Department. In cases where pre-funding is required on an ongoing basis, these arrangements should be referred to in the annual delegated sanction letter from my Department.

It is a matter for the Accounting Officer for the relevant Vote to ensure that any funding arrangements made fully comply with public financial procedures. The rationale for pre-funding should be documented by the grantor and available for audit and inspection, together with the monitoring and control arrangements attaching to the pre-funding. It is for the Comptroller and Auditor General to decide what issues to examine in the course of his office’s regular audits of departmental spending.

I am informed that to date my Department has not received any specific requests for sanction from the Department of Rural and Community Development in respect of pre-payments to local authorities.

Deputy Éamon Ó Cuív: I presume the reference in the circular to pre-funding relates to situations where the person who is going to engage in the expenditure would not have the where with all to carry out the work without pre-funding, which I understand. Would the Minister for Public Expenditure and Reform consider the fact that a Minister was not able to spend the money made available to a Department an adequate reason for pre-funding? It is obvious that local authorities handle much larger sums of money than the €28 million that was disbursed to 30 local authorities, amounting to less than €1 million each, and that following the normal pattern of vouched expenditure would not be a problem for them. In that context, would the fact that the Minister could not spend the Department’s money in time be a sufficient reason for the Department of Public Expenditure and Reform to give sanction for the pre-funding of local authorities so that the Government would not have the embarrassment of a Minister who was not able to spend the money allocated? That is basically what happened last year.

Deputy Paschal Donohoe: I can assure Deputy Ó Cuív that there are few Ministers more capable of spending money well than the Minister for Rural and Community Development, Deputy Ring.

Deputy Patrick O’Donovan: Deputy Dara Calleary knows that only too well.

Deputy Paschal Donohoe: When he is dealing with this matter this year, I am very confident that he will be ensuring that money made available will be spent. Deputy Ó Cuív can be certain that if the Minister for Rural and Community Development, Deputy Ring approaches my Department looking for a decision regarding pre-funding - he has not done so as yet - it will be for money that he is confident of spending. I am certain that if money is made available to his Department, it will be spent.

Deputy Éamon Ó Cuív: The Minister for Rural and Community Development was Minister of State at the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs last year and had responsibility for the same functions. The money was not spent last year and he had to pre-fund local authorities to the tune of €28 million. As I said in the preamble to the question, only 60% of that has been spent to date and the 40% of last year’s money which has not been spent amounts to €11 million. On top of that, it is likely that out of this year’s allocation, despite the smart-alec remarks, he will underspend by over €30 million on the capital side of his Department. I am asking if his inability to spend the money is sufficient reason for the Minister for Finance, rather than saying he can carry forward 10%, to give a pre-funding arrangement to local authorities which we know they have already abused this year and will likely abuse again next year.

Deputy Paschal Donohoe: There was no smart-aleckry in the comment I made. As somebody who has worked with the Minister, Deputy Ring, over many years and had the experience of working with him in the Department of Transport, Tourism and Sport, I know his ability and focus to ensure that plans from Government happen on the ground is unparalleled. If there is an issue in regard to the expenditure of money by local authorities I am confident the Minister, Deputy Ring, will fix it. As I said, to date he has not approached me looking for pre-funding for any programme. I know, given the engagement I have had with the Minister in recent weeks in the run-up to the budget, he is determined as a member of Cabinet to ensure that if funding is made available in the Department of Rural and Community Development, that money will be spent through local authorities and elsewhere. It is always the case, as the Deputy will know, that when we are dealing with local authorities, commitments and funding that are made available to them are, on occasion, not spent during the year. There are other Departments which have ample experience of this but, as I have said, I am confident the Minister, Deputy Ring, in his role in leading this new Department, will tackle and make progress on this matter.